China-based equipment and device vendor ZTE issued earnings guidance for 2017 forecasting a near 300 per cent increase in its net profit, boosted by growth in its operator network and consumer device divisions.
The company’s net profit in 2017 reached CNY4.55 billion ($722 million), an increase of 293 per cent from 2016 based on a preliminary financial statement. Operating revenue grew 7.5 per cent year-on-year to CNY108.8 billion.
ZTE said in the statement its results benefitted from continuous investment in networks by global operators.
“Excluding the impact of penalty payments imposed by US government authorities, the company’s net cash flow from operating activities was CNY12.44 billion, representing an increase of approximately 136.6 per cent over the previous year.” In March 2017 ZTE reached a settlement with the US government and agreed to pay a CNY6.8 billion penalty after admitting violating US trade sanctions.
In late October 2017 the company reported a sharp jump in net profit for the period from January to end-September.
Earlier this week ZTE revealed plans to raise CNY13 billion through a share placement to fund its investments in 5G technology development. The company said it will spend about CNY9.1 billion of the expected proceeds on “technology research and product development relating to 5G network evolution”, with the remainder allocated to replenishing working capital. ZTE also said it will spend a total of CNY42.9 billion on 5G over three years.